AHA Protests CMS 2.9% Final Inpatient Rule Cuts

John Commins, August 2, 2010

The American Hospital Association is strongly protesting the Center for Medicare & Medicaid Service's newly announced 2.9% final inpatient rule reimbursement cuts for Fiscal 2011, saying the economic impact from the loss of an estimated $3.7 billion in cuts could prove catastrophic for the nation's 3,500 acute-care hospitals.

"The rule cuts billions of dollars from the healthcare system at a time when patients are sicker, more people are losing coverage due to the economic downturn and hospitals are dealing with significant changes contained in the health reform bill," said AHA President/CEO Rich Umbdenstock. "The changes also will have unintended consequences; hospitals have been an economic mainstay during the recession, but the cuts create real potential to harm hospitals' ability to provide jobs."

Newly installed CMS Administrator Donald Berwick, MD, defended the cuts, which federal law dictates must recovered from hospitals that were overpaid for coding changes in FY 2008 and 2009 that did not reflect real changes in the patient mix.

"The final rule we are issuing will ensure that Medicare pays hospitals accurately for inpatient services for Medicare beneficiaries while fostering continuing improvements in the quality and safety of care," Berwick said.

The final rule applies to approximately 3,500 acute-care hospitals paid under the Inpatient Prospective Payment System, and approximately 420 long-term care hospitals paid under the LTCH Prospective Payment System, for discharges occurring after Oct. 1, 2010. It also updates the rate-of-increase limits for some hospitals excluded from the IPPS that are paid on a reasonable cost basis subject to these limits.

Umbdenstock said CMS failed to listen to concerns from members of Congress.

"A bipartisan majority of senators and representatives had expressed to CMS that the rule's coding offset would hurt their communities' ability to access healthcare," he said. "CMS also failed to acknowledge independent studies that show CMS' methodology does not take into account what we all know: hospital patients are increasingly sicker."

See also:
Inpatient Admissions Decision Fuels RAC Uncertainty

John Commins

John Commins is a senior editor at HealthLeaders Media.

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